Wednesday, March 17, 1999 Published at 11:40 GMTWorld: EuropeEU in Crisis: Q & AWilliam Horsley, BBC European Affairs Analyst, answers key questions on the dramatic events in the European Commission.

The report goes much further than most had expected in its criticism of the commission - to what extent is this a defining moment for the European Union?

It is unprecedented in the 42-year history of the EU. It is the biggest humiliation of the Commission and the most dramatic assertion of power by the European Parliament ever. Critics say it calls in question the existence of a powerful executive which is beyond the control of member states. Commission vice-president Sir Leon Brittan called it a disaster.

What does this report reveal about the way the commission does business?

The report of the five independent experts says the Commission lost control of the activities of its staff. That led to one clear case of nepotism and several examples of fraud going unstopped, even when they were known about. In the case of the department headed by French Commissioner Edith Cresson, on youth training, the failure to detect fraud and bogus contracts was called 'unacceptable'.

The European President Jacques Santer has rejected the report - was this a surprise?

No. Mr Santer was not personally tainted by scandal, although he is held responsible for the collective failings of his Commission. He also stresses that many of the cases which made headlines began well before he came to office in 1995. But Jacques Santer did initially resign, with his whole team, to take responsibility, so his later denials are a contradiction.

Isn't he now a lame-duck president?

Certainly. He claims he has the credibility and dignity to see out the rest of his term, until the end of this year. Most EU national governments want him replaced either straight away, or at any rate during this spring. He will always be remembered as head of a commission which resigned so as to avoid being sacked by the Parliament.

William Horsely has years of experience covering the EU

So what happens now?

The German Chancellor, Gerhard Schröder, heading the German 6-month presidency of the EU, will urgently consult the other heads of government. Probably they will announce a plan at the Berlin Summit next week. They have to decide which commissioners to remove and which to keep in an interim Commission. Meanwhile the old commission will stay on in a caretaker role.

Won't most of the commissioners who stepped down be re-appointed to their old posts quite soon?

Probably. Britain and Belgium say they want to re-instate their commissioners at once. But there will be arguments about others, especially Jacques Santer who has shown he wants to fight. In practice it would be extremely hard to find new commissioners to master every departmental brief with such a full work programme ahead.

If Santer is forced to resign - who's most likely to get the job?

The front-runners for the next full five-year term of the Commission President are Javier Solana, currently Nato secretary-general, and Wim Kok, now Dutch prime minister. The names of Romano Prodi, former Italian prime minister, and Filipe Gonzales, former Spanish prime minister, are also in circulation.

Hasn't something like this been coming for years?

Yes, in that the Parliament has several times threatened to censure or sack the Commission for its shortcomings. No, in that nobody was prepared for this dramatic resignation of the whole team, and now Europe's political leaders are having to make the rules up as they go along, and then agree a position with the Parliament.

Isn't there a credibility problem for the EU?

Yes indeed. The lame duck commission will now have to deal with a range of intractable issues without real authority. They include the Kosovo crisis, the looming trade was over bananas with the US, questions about the EU's economic policy after the shock resignation of finance minister Oskar Lafontaine, and the potentially explosive dispute over EU future financing.